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Playing back Video on HR2x with MediaShare

I have a big (1TB+) Library of movies encoded with MPEG2 at either 720p/1080i/1080p and with DD5.1 (AC3).

Most of my movies are over 10Mbits and therefore will not playback simply with media share. Now, I was hoping I could TRANSCODE my movies with TVersity and downres them to a point where they will play on the HR2x's in my home.

I have not had any success getting this to work. Can I do this? How do I set it up in TVersity? My movies all show up in the menu but when I select them on the HR2x it tries to play the movie but the screen stays blank and I get an unable to access media message. I have a few movies encoded using Windows Media Video and those play back just fine through TVersity on my HR2x.

So I am just wondering if I can transcode (downres) my MPEG-2 vids to work on the HR2x.